Financial Services Commission of Ontario
Neutral Citation: 2019 ONFSCDRS 15
FSCO A13-005469
BETWEEN:
S.P.
Applicant
and
UNIFUND ASSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before: Anne Sone
Heard: Final written submissions were received on March 26, 2019
Appearances: Roman Baber for S.P. Jonathan Schrieder for Unifund Assurance Company
Issues:
The Applicant, S.P., was injured in a motor vehicle accident on August 25, 2011. In a decision dated June 12, 2017, I dealt with her claims for statutory accident benefits under the Schedule.1 I made the following order, while reserving on the issue of expenses:
- S.P.’s claims are dismissed.
Subsequently, S.P. appealed this decision. On March 21, 2018, Director’s Delegate Lee dismissed the appeal.
The issue in this further hearing is:
- Is S.P. or Unifund Assurance Company entitled to her or its expenses incurred in respect of this arbitration hearing? If so, in what amount?
Result:
- Unifund Assurance Company is entitled to its expenses in the amount of $10,082.68, inclusive of fees, HST, and disbursements.
EVIDENCE AND ANALYSIS:
Entitlement to Expenses:
Pursuant to subsection 282(11) of the Insurance Act:
The Arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer all or part of such expenses incurred in respect of an Arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.
The criteria an adjudicator shall consider when deciding whether to award expenses are found in Ontario Regulation 664,2 in Rule 75.2 and Section F of the Dispute Resolution Practice Code (Fourth Edition — Updated January 2014). I will discuss each of these criteria in order.
(a) Each party’s degree of success in the outcome of the proceeding:
Unifund was entirely successful in the hearing, and incidentally, was entirely successful in the appeal.
(b) Any written offers to settle made in accordance with Rule 76:
Unifund made an offer of $2,500 to settle the issues in dispute. S.P. did not accept this offer.
(c) Whether novel issues are raised in the proceeding:
S.P. suggested that novel issues were raised in the proceeding regarding statutory interpretation of the Minor Injury Guideline.
(d) The conduct of a party or party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders:
Not applicable to this proceeding.
(e) Whether any aspect of the proceeding was improper, vexatious or unnecessary:
S.P. submitted that Unifund made pejorative allegations regarding the clinic providing the treatment.
Unifund raised the issue that this clinic no longer seemed to be in business; however, it was not my impression that there was a suggestion that no treatment was provided. Accordingly, I do not find that any aspect of the proceeding was improper, vexatious or unnecessary.
(f) Whether the insured person refused or failed to submit to an examination as required under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42(10) of that regulation.
Not applicable to this proceeding.
(g) Whether the insured person refused or failed to submit to an examination as required under section 44 of Ontario Regulation 34/10 (Statutory Accident Benefits Schedule — Effective September 1, 2010), made under the Act, or refused or failed to provide any material required to be provided under subsection 44(9) of that regulation.
Not applicable to this proceeding.
Conclusion:
Based on the outcome that Unifund was entirely successful in the Arbitration hearing, I find that Unifund is entitled to its expenses of this proceeding. As degree of success is the most important criterion in this case, I place the most weight on it.
I also note that S.P. did not accept Unifund’s settlement offer of $2,500. This offer exceeded her result at the Arbitration.
Amount of Expenses:
Statutory Framework:
The amount of expenses I may award is set out in section 3 of the Schedule to the Expense Regulation (Dispute Resolution Expenses) pursuant to subsection 282(11) of the Insurance Act. It states as follows:
3(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:
For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.
(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.
(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission or the Financial Services Commission of Ontario, as it may be amended from time to time.
Insurer’s Claim for Expenses:
In its Bill of Costs, Unifund claimed $14,739.69 for fees and $3,130.10 for disbursements, both inclusive of HST.
Analysis and Findings:
The overriding consideration in fixing arbitration expenses for legal fees is reasonableness.
S.P. submitted that Unifund’s claims for expenses were excessive, and, they should be considerably reduced by a factor of 25% to 40%.
The Arbitration in this matter was heard on November 24, 25, 26, 2014, January 30, June 5, 2015. I estimate that there was 25 hours of hearing time.
Fees:
In terms of the hearing time, Arbitrator Makepeace confirmed in Henri and Allstate Insurance Company of Canada,3 that “a line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses.”
As a rule of thumb, Arbitrators have allowed expenses for preparation for hearing time to the actual hearing time on a ratio of between 1:1 and 1:4.
Although hard fought, this was not a very complicated case with a lot of issues. Accordingly, I find that 2:1 is an appropriate ratio here.
As noted above, the Arbitration hearing took 25 hours of hearing time. Accordingly, I allow 50 hours for preparation time. I find that Unifund is entitled to a total of 75 hours for preparation and hearing time.
Unifund had a number of counsel representing it; however the majority of the work was done by Ms. Dominique Zipper, at the Legal Aid rate of $109.13 per hour. As a result, I find that Unifund is entitled to $9,248.76, inclusive of H.S.T., for its fees in this case.
Disbursements:
Unifund claims $3,130.10 for its disbursements, including HST.
The Dispute Resolution Expenses Regulation does not allow for the costs of a court reporter. Therefore, I do not allow this disbursement for $2,032.
I find that the remaining disbursements for copying and a process server are payable. In total, I find that $833.91 in disbursements, including HST are payable to Unifund.
Conclusion:
For the reasons set out above, I order S.P. to pay to Unifund in respect of the Arbitration proceeding, its expenses fixed at $10,082.68, inclusive of fees, H.S.T., and disbursements.
April 10, 2019
Anne Sone Arbitrator
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, as amended, it is ordered that:
- S.P. pay to Unifund Assurance Company in respect of the Arbitration proceeding, its expenses fixed at $10,082.68, inclusive of fees, H.S.T., and disbursements.
April 10, 2019
Anne Sone Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- Schedule to R.R.O. 1990, Reg. 664, made under section 282 (11) of the Insurance Act, as amended.
- (OIC A-007954, August 8, 1997)